Hydrogen is a gas that is colourless, odourless, non-toxic and highly combustible but, most importantly, it stores energy that can be recovered without giving off carbon dioxide gas and contributing to global warming. As such, it is expected to be a key energy commodity as the world transitions from fossil to renewable energy.
With abundant sunlight and wind to turn renewable electricity into hydrogen, and a well-established energy export sector, Australia is well-placed to become a global hydrogen powerhouse.
But first we need to produce enough hydrogen at a competitive price and improve the technology needed to ship it around the world.
In a Q+A for Westpac IQ, Dr Patrick Hartley, Leader of the CSIRO Hydrogen Industry Mission, outlines the opportunities – and challenges – this new fuel source presents.
What are the major applications for hydrogen and how will that drive demand in future?
There are diverse applications for hydrogen across the energy and industrial sectors. They span mobility – using hydrogen as a fuel for powering vehicles – and the use of hydrogen to replace natural gas in gas networks, because it’s a clean gas that burns without emitting greenhouse gases.
You can also use hydrogen to replace fossil fuels in industrial heat production. It is already used as an industrial feedstock for things like chemicals production, ammonia and petrochemicals production.
Hydrogen technologies can also play an important role in electricity systems. Electricity is used to make hydrogen by splitting water in a process called electrolysis, and hydrogen fuel cells effectively reverse this process to turn hydrogen back into electricity. And so you can start thinking about how hydrogen can play a role in the transition of the electricity system to clean energy.
We're just getting started in many ways with the broader uses of hydrogen now. But as we diversify the uses of hydrogen through those applications just mentioned, the demand will grow. That's a good thing, because if the demand for hydrogen grows then it will actually drive down the costs of production and make it more competitive with fossil fuels in more and more applications.
What is – and what will – the market be worth?
The federal government expects the future Australian hydrogen industry to directly support more than 16,000 jobs by 2050, plus an additional 13,000 jobs from the construction of related renewable energy infrastructure. Australian hydrogen production for export and domestic use could also generate more than AUD 50 billion in additional GDP by 2050.
What are the major export opportunities?
Moving hydrogen as an export commodity is certainly an attractive way of monetising the huge clean energy resource that we can produce in Australia. There are many countries with quite a number of approaches being adopted to designing markets and developing technologies that enable international hydrogen trade. Japan, in particular, has been doing a lot of work on what the hydrogen import-export trade could look like.
One option is to actually put hydrogen on ships. Now, if you're shipping things around the world, you want to cram as much of that energy into the smallest possible volume you can. That's why you need to do something to make hydrogen economic to ship.
One approach being looked at to densify that hydrogen is liquefaction, where you cool down the hydrogen to minus 253 degrees. It’s currently expensive, but the technology is still just getting going, so this should change.
The other way of moving hydrogen is actually to convert it into something else that can be a carrier for it. Ammonia is one of those carriers and the nice thing about ammonia is that it's a liquid in fairly ambient conditions. There's always a trade-off, though. That conversion is not cheap either. And the reconversion to recover the hydrogen at the destination requires additional infrastructure.
What are Australia’s advantages as a supplier of hydrogen?
The reason why we're a global powerhouse in exports of energy is because we've got a lot of energy resources, and that includes both fossil fuel resources like natural gas, but we're also very lucky that we have tremendous potential to produce renewable energy, using things like solar energy and wind energy in different parts of the country.
We also don't have such a huge domestic population that will use all of that energy. Plus, because of the existing energy export and trade experience that we have, in many ways we have all the ingredients for being able to export that clean energy.
What are some of the major projects underway?
The transport of liquid hydrogen to Japan is being demonstrated in the ‘Hydrogen Energy Supply Chain’ project in Victoria.
This is a pilot project that is producing hydrogen using the brown coal resources there, via a process called gasification, and building this infrastructure to liquefy and transport hydrogen by ship.
In January, the Suiso Frontier sailed out of Hastings in Victoria to take the world’s first liquid hydrogen shipment from Australia to Japan.
However, the process that's being used to make this hydrogen produces CO2. So, if it goes to commercial scale, then the intent is for those emissions to be mitigated through the use of CO2 capture and storage resources in Victoria.
Renewable hydrogen – also known as green hydrogen – is produced using renewable energy and has no emissions in the production and no emissions at the point of use, and so the ultimate goal is to ramp up production using this technology.
The problem really is that the amount of renewable energy we need to produce – and the scale of hydrogen that we're talking about for an import-export industry – is really huge. It's so huge that a build of that scale is going to take time. So the potential to use clean, but not completely green technologies to build supply chains probably makes sense in the near term, particularly from a cost perspective.
What are the impediments to progress?
The key challenge at the moment is getting hydrogen produced at scale cheaply, because right now it’s still a bit more expensive than existing fossil fuel feedstocks in most applications.
If you can increase demand through new applications for hydrogen and scale up those applications, you can drive down the costs of the technology and production down through economies of scale.
Making improvements to things like manufacturing processes for hydrogen technologies much more efficient will also contribute to us achieving the goal that's been stated by our government of ‘H2 Under 2’, which is hydrogen at AUD 2 a kilo.
The production costs – not including the supply chain costs – at the moment are probably around about AUD 5, depending on who you ask. So that AUD 2 goal is achievable, but it's a goal we're going to have to work towards and we are focusing CSIRO’s research and development partnerships through our CSIRO Hydrogen Industry Mission to do this.
The cost of building renewable power projects has been estimated at AUD 500 billion. How will this impact the development of a hydrogen industry?
To replace the current energy sources in all the possible places where hydrogen could do that is a huge ask. It's the same for electricity, actually. The scale of the build to get renewable energy into a much greater portion of the energy system is massive. And it's going to take time.
Will we be able to repurpose other infrastructure, such as the existing pipelines which have been built to convey natural gas?
There are challenges associated with moving to 100 per cent hydrogen in gas pipelines. And those relate to things like the material properties of the pipeline, because hydrogen has some unique properties when it comes into contact with steel.
It also burns differently, so things like appliances need to change. At the moment, the gas pipeline industry in Australia in particular is focused very much on getting 10 per cent hydrogen into its gas pipelines. That's seen as a level that they can tolerate with the existing infrastructure.
What about the need for desalination plants?
The amount of water needed to produce hydrogen is going to be significant – but we know it can be done from experience in the mining industry. In some places, desalination will be needed, but the cost of desalination of water is actually not that huge as a fraction of the hydrogen production cost.
What’s the cost of switching from coal in steelmaking to hydrogen?
That's very a big question and the technology is still pretty immature, but it can be done. We think more generically around heavy industrial uses of hydrogen. And, of course, anything to do with heavy industry is a big capital investment.
Ultimately, as a fuel source, is hydrogen as efficient as electricity?
It's all about how many transitions you go through when you're converting energy into one form or another. There are losses in producing hydrogen from renewable sources, which typically convert electricity into hydrogen. And then, if you're using it in things like cars, you convert it back into electricity to drive the vehicles. Each one of those steps has an amount of loss associated with it.
The key question is not around efficiency. You don't necessarily think about efficiency when you're driving a car. You think about how much it's costing you and that's a very different question to an efficiency question. Existing internal combustion engines are only about 30 per cent efficient, believe it or not.
So, what are the key government reports or roadmaps for this sector?
The National Hydrogen Strategy is always a good place to start.
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